Compute the return on stockholders equity

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Problem - Financial leverage - Southvrest Airlines Co. (LUV) reported the following data (in millions) for a recent year:

Sales $19,820

Operating income 2,181

Average total assets 20,518

Average stockholders' equity 7,067

Required -

1. Compute the return on total assets. Round to one decimal place.

2. Compute the return on stockholders' equity. Round to one decimal place.

3. Compute the profit margin, asset turnover, and financial leverage metrics using the expanded DuPont formula. Round profit margin, asset turnover, and financial leverage to two decimal places. Round return on stockholders' equity to one decimal place.

Reference no: EM132707047

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